For almost 25 years, the Balanced Scorecard has rocked the world of finance, challenging conventional thought patterns. Developed by Doctors Robert S. Kaplan and David P. Norton, the scorecard goes beyond traditional measures of financial performance and has strengthened the understanding managers have of the way their companies function. The value of the scorecard lies in its emphasis on the prediction of future financial performance, instead of merely reporting on what has already happened. It continues to be relevant as it continues to challenge firms to adopt a more strategic approach to financial service provision, leading to greater expansion and market penetration.
Part of this shift in approach entails financial practices rethinking the way they see their clients: taking a tactical outlook rather than viewing clients as numbers to be crunched is the first step. This needs to be followed by the cultivation of four traits that have been found to be the hallmarks of an effective practice.
Let’s take a closer look at these four traits in the following paragraphs:
1. Using technology to get ahead
Cloud technology and the widespread accessibility of the internet are redefining the way accounting and audit practices operate, which allows for the rapid sharing of information, collaboration across vast distances and eliminates the tendency towards wasted time that comes with traditional systems. The modern accounting and audit practitioner knows that time is money – for themselves and their clients – and leverages technology smartly to increase efficiency and shorten turnaround times to their customers. Here’s an insightful interview with leading accounting practitioners that looks at technology’s influence on the accounting industry. Two key take-aways are that technological solutions greatly enhance efficiency, and also significantly reduce turnaround times for clients.
2. Positioning yourself as an industry specialist
An effective practice is one that pushes the boundaries. To be successful in today’s business environment, a practice needs to do more than just balance the books and provide financial statements for clients. They need to cut operating costs and increase capital by leveraging additional sources of revenue. Identifying an industry niche and building a reputation as a leading specialist service provider therein can help firms get ahead. For example, firms that focus on the general construction industry could offer advice on industry trends and changes to regulations that may impact clients.
3. Having a strong business strategy
Small businesses have a very high failure rate – particularly in Africa. Start-up businesses on this continent are more likely to be discontinued than anywhere else in the world. The reason? In many cases, lack of financial planning. Small business owners may know what they want their enterprises to look like down the line, but they need outsourced expertise to get them there. An effective accounting and audit firm understands that telling their clients what they want to hear won’t get them far; instead, what is needed is sensible, practical advice. Firms that position themselves securely as strategic partners with value-added offerings are the ones that best serve both themselves and their communities.
4. Running an efficient, compliant firm
A malpractice suit can seriously damage the reputation of both a firm and its clients. In addition, lawsuits are expensive, time- and energy- consuming, and can strain client relations severely. Firms that are guided by the standards and ethics stipulated by regulating bodies are likely to bring those values to the clients they serve, and function more effectively and sustainably. Financial best practices are regularly revised according to market and industry changes in order to ensure that efficiency and transparency are maintained within a complex, changing business environment.
Modern accounting and audit platforms are useful in ensuring compliance and bringing efficiency to the work processes of accounting and audit firms. Many practices across the continent have recognised the benefits of new delivery platforms and are reaping the rewards in the form of a greater competitive edge and an enhanced value offering for clients.
Focus on becoming a business partner rather than just a service provider
An effective practice today understands the needs and goals of their clients. Rather than providing generic services and an impersonal relationship, they make meaningful partnerships with their clients. They differentiate themselves from competitors; rethinking business practices and redesigning their offerings so that they go beyond the expected and push the boundaries. The time is ripe to do this: there have never been more opportunities to gain an edge. With disruptive technologies in full swing, leveraging the right combination of tools is the key to success.